A super simple thread to help everyone understand the concept of 'Fiscal Deficit' and what happens when government spends more than its receipts. 👇🧵

#fiscaldeficit #economics #financialliteracy

1. Let us understand everything bit by bit.
Say, Raju is a businessman. Now, like every businessman, Raju is ambitious and curious to know his profit. Hence, he keeps his accounts to calculate his profit.

2. Throughout the year, his total revenue was Rs.10 lakh and his total expenditure was Rs.8 lakh. Hence, Raju is having profit or surplus of Rs.2 lakh.

3. The next year, due to lack of demand, his revenue fell to Rs.7 lakh and his expenses increased to Rs.9 lakh. Hence, Raju is now having loss or deficit of Rs.2 lakh.

4. Now, let us replace ‘Raju’ with ‘Government’ and you get the concept of ‘Fiscal surplus/ deficit’.